AGLO 1973 No. 31 - Feb 28 1973
MOTOR VEHICLES ‑- EXCISE TAXES ‑- DISTRIBUTION ‑- APPROPRIATION
Three questions relating to the use and distribution of motor vehicle excise taxes imposed by municipalities and collected by the state for local public transportation under RCW 35.58.272, et seq.; effect of appropriation upon mandatory distribution formula; ability of legislature to provide for different uses of funds by amendment.
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February 28, 1973
Honorable R. Frank Atwood
State Senator, 42nd District
Olympia, Washington 98504 Cite as: AGLO 1973 No. 31
By letter previously acknowledged you requested our opinion on several questions pertaining to the use and distribution of motor vehicle excise taxes imposed by municipalities and collected by the state for local public transportation under RCW 35.58.272, et seq. We paraphrase your questions as follows:
(1) Do the provisions of RCW 35.58.272-35.58.279 together with RCW 82.44.150 (2) (c) and (6), require the state treasurer to distribute all revenues derived from motor vehicle excise taxes levied by municipalities under these statutes to the municipalities by which such taxes were imposed, subject only to a requirement that any such distribution be matched, dollar for dollar, by other local revenues collected by the particular municipality for public transportation purposes?
(2) If question (1) is answered in the affirmative, may the amounts of such local motor vehicle excise tax revenues to be returned to the municipalities by which they were imposed be effectively limited by a provision in the 1973-75 biennial state appropriations act (S.B. 2104) "appropriating" a lesser amount than would otherwise be distributable under the statutory formula set forth in these statutes?
(3) If question (2) is answered in the affirmative, may the motor vehicle excise tax revenues not returned to the municipalities because of a limitation imposed by an appropriations act be used, instead, for other general governmental purposes of the state?
We answer both questions (1) and (2) in the affirmative, and question (3) in the manner set forth in the analysis.
[[Orig. Op. Page 2]]
RCW 35.58.272-35.58.279 codify the provisions of §§ 7-14, chapter 255, Laws of 1969, Ex. Sess. The first of these sections, RCW 35.58.272, defines the term "municipality" for the purposes of this legislation as meaning:
". . . any metropolitan municipal corporation which shall have been authorized to perform the function of metropolitan public transportation and any city which is not located within the boundaries of such a metropolitan municipal corporation and which owns, operates or contracts for the services of a publicly owned or operated system of transportation."
RCW 35.58.273, codifying § 8 of the act, then provides, in material part, as follows:
"On or after July 1, 1971, any municipality is authorized to levy and collect a special excise tax not exceeding one percent on the fair market value of every motor vehicle owned by a resident of such municipality for the privilege of using such motor vehicle provided that in no event shall the tax be less than one dollar and, subject to the provisions of subsection (2) of RCW 82.44.150, the amount of such tax shall be credited against the amount of the excise tax levied by the state under RCW 82.44.020: . . ."
Under RCW 35.58.276 and 35.58.277 (codifying §§ 11 and 12) this special excise tax, if imposed by a municipality, is to be collected by the auditor of the county in which such municipality is located; the proceeds are then to be remitted to the state where they are paid into the motor vehicle excise tax fund. RCW 35.58.278 (codifying § 13) then provides that:
"Distribution of the special excise taxes paid into the motor vehicle excise tax fund on behalf of any municipality shall be made to such municipality as provided in RCW 82.44.150, as now or hereafter amended."
As amended by § 15, chapter 255, supra, RCW 82.44.150 (referred to in this last statute) provides, in material part, as follows:
"(1) . . .
"(2) On the first day of the months of January, April, July, and October of each year, the state treasurer shall make the following apportionment and distribution of all moneys remaining in the [[Orig. Op. Page 3]] motor vehicle excise fund: . . . a sum equal to eighty-one and thirty-four one hundredths percent of all motor vehicle excise tax receipts including those levied and collected on behalf of a municipality imposing a tax authorized by RCW 35.58.273, shall be allocable to the state school equalization fund and credited and transferred each year in the following order of priority:
". . .
"(c) The amount required to remit to a municipality the proceeds of the tax authorized under RCW 35.58.273 shall be remitted to the municipality levying such tax.
"(d) Any remaining amounts from the motor vehicle excise taxes not required for debt service on the above bond issues or to be remitted to a municipality as required under subsection (c) of this subsection shall be transferred and credited to the general fund.
". . .
"(6) The amount required under subsection (2) (c) of this section to be remitted by the state treasurer to the treasurer of any municipality levying such tax shall not exceed in any one calendar year the amount of locally generated tax revenues other than the excise tax imposed under RCW 35.58.273, which shall have been budgeted by such municipality to be collected in such year for any public transportation purposes including but not limited to operating costs, capital costs and debt service on general obligation or revenue bonds issued for such purposes."
Last to be noted before turning to your questions is RCW 35.58.279, codifying § 14, chapter 255,supra, which provides that:
"All taxes levied and collected under RCW 35.58.273 shall be credited to a special fund in the treasury of the municipality imposing such tax. Such taxes shall be levied and used solely for the purpose of paying all or any part of the cost of acquiring, constructing, equipping or operating a publicly owned mass transportation system, or contracting for the services thereof, or to pay or secure the payment of all or part of the principal of or interest on any general obligation bonds or revenue bonds issued for public transportation capital purposes and [[Orig. Op. Page 4]] until withdrawn for use, the moneys accumulated in such fund or funds may be invested by the treasurer of such municipality in the manner authorized by the legislative body of the municipality.
"If any of the revenue from any such special excise tax shall have been pledged by any municipality to secure the payment of any bonds as herein authorized, then as long as that pledge shall be in effect the legislature shall not withdraw from the municipality the authority to levy and collect the tax. Upon the effective date of this 1969 act any municipality is authorized to pledge that the tax authorized by RCW 35.58.273 shall be levied, collected and applied as provided in this 1969 act to pay or secure the payment of any bonds issued by such municipality after such effective date for authorized public transportation purposes."
The second paragraph of this last statute constitutes, in essence, a legislative recognition of the contractual relationship which arises between a taxing authority and holders of bonds for the payment of which a particular tax source has been pledged ‑ once such bonds have been issued. Accord,Ruano v. Spellman, 81 W.D.2d 820 (1973) [[81 Wn.2d 820]], and cases cited therein. We are, however, advised that at the present time no bonds pledging any of the resources of the special excise taxes here in question have yet been issued by any municipality.
Your first question is whether the foregoing provisions require the state treasurer to returnall locally generated motor vehicle excise tax revenues to the municipalities by which such taxes were imposed ‑ subject only to the condition of RCW 82.44.150 (6) that the amounts thus distributed be matched, dollar for dollar, by other locally generated revenues collected for public transportation purposes.
In our opinion, insofar as the present terms of the subject statutes are concerned, this question is clearly answerable in the affirmative. As quoted above, RCW 35.58.278 (repeated for ease of reference) expressly provides that:
"Distribution of the special excise taxes paid into the motor vehicle excise tax fund on behalf of any municipality shall be made to such municipality as provided in RCW 82.44.150, as now or hereafter amended." (Emphasis supplied.)
[[Orig. Op. Page 5]]
Likewise, this same mandatory word "shall" also expressly appears in subsection (2) (c) of RCW 82.44.150, supra, leaving no doubt, in our opinion, as to the answer to this initial question in your request.
We should emphasize, however, the qualification to this requirement which is provided for in subsection (6) of RCW 82.44.150, supra. This subsection requires, as a condition precedent to such distribution, a determination of the locally generated tax revenues budgeted for the same purpose (i.e., public transportation) by each municipality to which distribution will be made; it then prohibits any distribution to a municipality in excess of that matching amount. Any remaining amounts in the state school equalization fund1/ not thus distributable to municipalities, and not required for debt service under subsections (a) and (b) of the statute are required, by subsection (d) to be "transferred and credited to the state general fund."
Your second question assumes the foregoing answer to question (1), and asks whether the amounts of locally imposed and state collected motor vehicle excise tax revenues which are to be distributed to the municipalities under the foregoing statutory formula may be effectively limited by a provision in the biennial state appropriations act "appropriating" a lesser amount than would otherwise be distributable under this formula.
As you know, something of this nature was arguably within the purview of § 25, chapter 275, Laws of 1971, Ex. Sess. ‑ the omnibus appropriations act for the current 1971-73 biennium. This section provided,interalia, for an appropriation of only $6,935,900 for distribution to eligible municipalities under RCW 82.44.150 ‑ an amount which was substantially less than the total amount of distributable revenue generated during the biennium by all municipalities imposing special motor vehicle excise taxes under RCW 35.58.273, et seq., supra. In view of this appropriation we were asked by the state office of program planning and fiscal management whether the dollar figure set forth in § 25,supra, constituted an effective limitation upon the total amount of RCW 35.58.273 revenues which could be paid to all eligible municipalities under RCW 82.44.150, supra, during the biennium.
[[Orig. Op. Page 6]]
Upon reviewing the entire appropriation act we found therein another provision, § 102, which stated that:
"In addition to the amounts appropriated in this act for revenue for distribution and bond retirement and interest, and interest on registered warrants, there is also appropriated
such further amounts as may be required or available for these purposes under any statutory formula or under any proper bond covenant made in accordance with law."
In view of this provision, we found it unnecessary to reach the question of whether the specific appropriation item contained in § 25 effectively limited distributions during the biennium; instead, by memorandum opinion dated June 30, 1972, copy enclosed, we advised that because of § 102, supra, it was our opinion that all of the subject revenues distributable under the formula set forth in RCW 35.58.273-35.58.279 and RCW 82.44.150, supra, should be distributed to the eligible municipalities in accordance with this formula for the 1971-73 biennium.
In apparent reaction to this memorandum opinion, however, you have informed us that although the proposed 1973-75 omnibus appropriations bill contains a counterpart to § 102, chapter 275, supra, that section has been so drafted as to expressly exclude from its operation ". . . those funds appropriated for urban mass transit assistance . . ." by another section of the bill which would emulate § 25, chapter 275, supra, and set a limitation of $12,000,000 on the amounts of locally imposed but state collected motor vehicle excise tax revenues to be returned to the eligible cities during the forthcoming biennium.2/
The essence of your second question goes to the legal effectiveness of this proposed limitation. In our judgment, for reasons it was unnecessary for us to go into in our June 30, 1972, memorandum opinion, supra, we think that such an appropriation item as this, if enacted by the legislature, would constitute an effective limitation upon the amounts to be distributed to municipalities under RCW 82.44.150, et al.,supra.
We begin with the proposition that the legislature has power to enact any law not prohibited by the state or federal Constitutions. Union High Etc. v. The Taxpayers Etc., 26 Wn.2d 1, 172 P.2d 591 (1946);Paine v. Port of Seattle, 70 Wash. 294, 126 Pac. 628, 127 Pac. 580 (1912). The only [[Orig. Op. Page 7]] such prohibition which appears at all pertinent to this discussion is Article II, § 37 of our state Constitution, which provides as follows:
"No act shall ever be revised or amended by mere reference to its title, but the act revised or the section amended shall be set forth at full length."
The purpose of that section is explained in State ex rel. Gebhardt v. Superior Court, 15 Wn.2d 673, 685, 131 P.2d 943 (1942), as follows:
"The section of our constitution above referred to was undoubtedly framed for the purpose of avoiding confusion, ambiguity, and uncertainty in the statutory law through the existence of separate and disconnected legislative provisions, original and amendatory, scattered through different volumes or different portions of the same volume. Such a provision, among other things, forbids amending a statute simply by striking out or inserting certain words, phrases, or clauses, a proceeding formerly common, through which laws became complicated and their real meaning often difficult of ascertainment. The result desired by such a provision is to have in a section as amended a complete section, so that no further search will be required to determine the provisions of such section as amended."
However, Article II, § 37, supra, does not forbid amendments or repeals by implication. Thus, a statute which is complete in itself covering the subject matter of an earlier statute in a manner partially or wholly inconsistent therewith, constitutes an effective and valid amendment or repeal of such earlier enactment to the extent of that inconsistency. See,In re Dietrick, 32 Wash. 471 (1903); Taylor v. Greenler, 54 Wn.2d 682, 344 P.2d 515 (1959);Mahler v. Tremper, 40 Wn.2d 405, 243 P.2d 627 (1952), and cases cited therein. Furthermore, a statute of that nature is not invalid under Article II, § 37,supra, merely because it refers to an earlier or separate act for the identification of its subject matter; nor even if it adopts in whole or in part the provisions of some other statute. See,State ex rel. Hansen v. Salter, 190 Wash. 703, 70 P.2d 1056 (1937);Roehl v. Public Utility Dist. No. 1, 43 Wn.2d 214, 261 P.2d 92 (1953).
An appropriation act may, like any other law, contain one or more provisions which are inconsistent with earlier general laws and, in accordance with the principles we have just set forth in this opinion, suspend the operation of such general laws on a given subject. State ex rel. Jones v. [[Orig. Op. Page 8]] Clausen, 78 Wash. 103, 138 Pac. 653 (1914). The only difference is that such an act, being temporary in its nature, cannot purport to have such an effect beyond the fiscal biennium for which it is enacted. See,Wash. Toll Br. Etc. v. State, 49 Wn.2d 520, 304 P.2d 676 (1956); also,State ex rel. Wash. Toll v. Yelle, 54 Wn.2d 545, 342 P.2d 588 (1959). As our court said inState ex rel. Jones v. Clausen, supra, at page 112,
"Appropriation bills, although temporary in duration, are nevertheless general laws. They are most carefully prepared and maturely considered. If they do not offend against the constitution, and are found to be in irreconcilable conflict with a permanent act, the latter will be held to be suspended or repealed during the time the appropriation bill is in force. Brooks v. Jones,supra; State ex rel. Buchanan v. State Treasurer, 68 S.C. 411, 47 S.E. 683."
Clearly the purpose of an item in the proposed 1973-75 appropriation act, such as you have described, would be to limit the amount of such proceeds that could be distributed during the next ensuing biennium. RCW 43.88.070, which would have to be read in conjunction with such an appropriation,3/ provides as follows:
"Appropriations shall be deemed maximum authorizations to incur expenditures but the governor shall exercise all due supervision and control to ensure that expenditure rates are such that program objectives are realized within these maximums."
Thus, such an appropriation would constitute a complete act on the subject, effectively limiting the amounts of the proceeds of the special municipal motor vehicle excise tax revenues in question which could be distributed to municipalities from the state school equalization fund. In terms of Article II, § 37,supra, and the cases which we have just cited interpreting that section, its legal effect would be either to supplement RCW 82.44.150,supra, or to suspend its operation for the next ensuing biennium insofar as the provisions of that statute would otherwise require the distribution of any additional such revenues.
[[Orig. Op. Page 9]]
There are, incidentally, several earlier opinions of this office regarding the effect of provisions of that nature or a similar nature in an appropriation bill. See, for instance, our opinion to the chairman of the state Horse Racing Commission dated June 30, 1967; also, our informal opinion to you dated November 28, 1972, copies of which are enclosed.
In our opinion, however, simply appropriating to municipalities less than all of the motor vehicle excise tax revenues distributable under RCW 82.44.150 (6),supra, would not free the unappropriated balance of these distributable revenues to be used for other governmental purposes.
Our reason for concluding above that the proposed appropriation item would have the effect of limiting distributions at all is its direct conflict with RCW 82.44.150, insofar as that statute might require a greater amount to be distributed during the next biennium. The basis for our conclusion on this point is, of course, the judicially established rule of statutory construction which recognizes implied statutory amendments under certain well defined conditions.
A corollary to that rule, however, is that implied amendments are strictly construed. As our court said inTacoma v. Cavanaugh, 45 Wn.2d 500, 503, 275 P.2d 933 (1954), quoting from earlier cases:
"'"Repeals by implication are ordinarily not favored in law, and a later act will not operate to repeal an earlier act except in such instances where the later act covers the entire subject matter of the earlier legislation, is complete in itself, and is evidently intended to supersede the prior legislation on the subject, or unless the two acts are so clearly inconsistent with, and repugnant to, each other that they cannot, by a fair and reasonable construction, be reconciled and both given effect."'"
Accordingly, such a provision in the appropriation act as § 45 of Senate Bill 2104,supra, would have to be construed as leaving intact the remaining substantive provisions of RCW 82.44.150 (2) (c), supra, with which it would not conflict. That subsection, unless further amended in some appropriate manner, would still require the treasurer to remit ". . . the proceeds of the tax authorized under RCW 35.58.273 . . . to the municipality levying such tax" and subsection (d) of that same section would still provide that ". . . any remaining amounts from the motor vehicle excise taxesnot [[Orig. Op. Page 10]] required for debt service on the above bond issues or to be remitted to a municipality as required under subsection (c) of this section, shall be transferred and credited to the general fund." (Emphasis supplied)
The effect of the limiting provision in the appropriation act, as proposed, would not change that distribution requirement. Its only effect would be to limit the amount actually distributable to municipalities during the ensuing fiscal biennium and thus postpone the required ultimate distribution until a future time.
We should add, however, that inasmuch as no municipal bonds have yet been issued in reliance upon any resources of the special excise taxes in question, nothing in the Constitution would prohibit the legislature from expressly further amending RCW 82.44.150, supra, to provide for the additional transfer to the general fund of such revenues in excess of appropriated amounts. A substantive statute expressly amending the distribution-reversion formula of RCW 82.44.150,supra, would, of course, be the most safe and certain means of accomplishing that purpose in view of Article II, § 37 of the Constitution,supra. However, under the reasoning and authorities set forth earlier in this opinion, the legislature might constitutionally achieve the same result by implied amendment. Such an implied amendment could result from the enactment of either of two types of conflicting statutes; that is, either a conflicting general statute of a continuing nature or an additional provision in the appropriation act, expressly appropriating to the general fund all such proceeds of the subject municipally imposed motor vehicle excise taxes as exceed the amounts appropriated for distribution to municipalities under RCW 82.44.150, supra. The latter provision, of course, could be made effective only for the period of the appropriation act itself. State ex rel. Wash. Toll v. Yelle, supra. Either such implied amendment, if properly drafted, could be held valid on reasoning analogous to that of our supreme court in State ex rel. Hansen v. Salter, supra. That case, coincidentally, also involved a statute levying certain motor vehicle excise taxes for the state school equalization fund, the revenues of which were to be allocated to counties for common school support. Appellants, who were county commissioners of Thurston county, brought action to compel their county assessor to assess ad valorem taxes on automobiles for the year in question, contending that the new law levying the excise taxes in question (chapter 228, Laws of 1937) was unconstitutional. Among other things they argued that this law violated Article II, § 37,supra, [[Orig. Op. Page 11]] because of a provision contained therein expressly limiting the allowable total millage that could be levied for school purposes under another and separate existing statute (RRS 4936) referred to in the new act. Disposing of plaintiffs' (appellants') argument, the supreme court said at pages 707-708 of its opinion in that case:
"The reference to Rem. Rev. Stat., § 4936, contained in § 12, chapter 228, Laws of 1937, is in no sense an attempt at an amendment. It does not even refer to § 4936,as amended by § 2, chapter 226, Laws of 1937. It (§ 12, chapter 228) simply identifies the levy authorized by Rem. Rev. Stat., § 4936, and imposes a limitation, which was absent in the section as amended by § 12, chapter 28, Laws of 1933. In essence, the reference to Rem. Rev. Stat., § 4936, constitutes no more of an amendment than the forty mill limit laws (chapter 1, Laws 1937, p. 3; chapter 2, Laws 1935, p. 8) constitute amendments of all former laws relating to limitation on tax levies. To such a situation, the constitutional provision (Art. II, § 37), requiring an amended statute to be set out in full, does not apply. See: Holzman v. Spokane, 91 Wash. 418, 157 Pac. 1086; In re Peterson's Estate, 182 Wash. 29, 45 P.2d 45."
In summary, we answer your questions as follows:
(1) The provisions of RCW 35.58.273-35.58.279 together with RCW 82.44.150 (2) (c) and (6), as presently in effect, require the state treasurer to distribute all revenues derived from motor vehicle excise taxes levied by cities under these statutes to the cities by which such taxes were imposed, subject only to a requirement that any such distribution be matched, dollar for dollar, by other local revenues collected by the particular city for public transportation purposes.
(2) The amounts of such local motor vehicle excise tax revenues to be returned to the cities by which they were imposed would be effectively limited for the period of the next ensuing biennium by a provision in the 1973-75 biennial state appropriations act "appropriating" a lesser amount than would otherwise be distributable under the statutory formula set forth in those statutes.
[[Orig. Op. Page 12]]
(3) A provision in the biennial state appropriations act "appropriating" a lesser amount than would otherwise be distributable under the statutory formula set forth in RCW 82.44.150, although effectively "impounding" in the state school equalization fund the balance of such revenues otherwise distributable, would not free such unappropriated balance for transfer to the general fund or otherwise allow its use for any governmental purposes other than distribution at some future date to the municipalities entitled thereto. However, the legislature could provide for alternative uses of such unappropriated balances either by expressly amending RCW 82.44.150, supra, or, possibly, by the less constitutionally safe procedure of an implied amendment. Such an implied amendment could be effected on a permanent basis by a conflicting general statute or, for the 1973-75 biennium only, by an additional provision in the appropriation act (i.e., in addition to the appropriation language presently contained in § 45 of Senate Bill 2104).
We trust the foregoing will be of assistance to you.
Very truly yours,
ROBERT F. HAUTH
Assistant Attorney General
*** FOOTNOTES ***
1/To which the subject revenues have been transferred from the motor vehicle excise tax fund under RCW 82.44.150 (2), and from which the distribution to the eligible municipalities is to be made.
2/See, §§ 104 and 45, SB 2104.
3/The legislature presumably has that existing statute in mind in making such an appropriation. State v. Thornbury, 190 Wash. 549, 69 P.2d 815 (1937).